Officials have mixed reactions to tax-sharing bill

ANNAPOLIS ?Â A bill on sharing tax revenue in Washington County has stirred up mixed feelings.

A county commissioner sees it as a step backward for local government relations.

Hagerstown's mayor, who requested the bill, said it didn't come out how he wanted, but the result was in the city's favor, so he didn't complain.

Some Republican state lawmakers from the county think the delegation's sole Democrat should have worked with them instead of filing the bill on his own.

The Democrat said the bill had no chance, anyway; it was just to get people talking about the issue.

The bill proposes two things.

First, it would shift Washington County from "may" to "shall" for giving tax rebates to its municipalities.

Municipalities get rebates, or setoffs, for providing services for which the county would have been responsible. Having a local police force is one example.

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Washington County currently gives tax setoffs to its municipalities, but the "shall" clause would make that a requirement.

The second half of the bill created a bigger change ? and more tension.

It would force the county to give back to the municipalities whatever recordation and transfer tax revenue is generated within municipal boundaries.

This fiscal year, Washington County planned to take in a total of $9 million in recordation taxes and $3 million in transfer taxes, Treasurer Todd Hershey said.

"Assuming that 36 percent of county recordation and transfer taxes are attributable to property located within a municipality, county revenues could decrease by $4.3 million while municipal revenues would increase by the same amount," a fiscal analysis by the state Department of Legislative Services says.

About 36 percent of the county's population is in the municipalities, the analysis says.

With the county standing to lose that much money, it should get a chance to speak about the bill before it's filed, Commissioner Kristin B. Aleshire said Friday.

"There was no discussion about the bill, before it was submitted, with any municipality or county or delegation," he said, contrasting it to inclusive talks a few years ago about a county excise tax.

Aleshire, a former city councilman, said the county and city have worked in recent years to mend their relationship. This bill, however, "only serves to break down the effort of cooperation," he said.

On Feb. 5, Hagerstown Mayor Robert E. Bruchey II sent a letter to Del. LeRoy E. Myers, the delegation chairman, asking for the "shall" provision and applying the setoffs to "all duplicated services," not just police and parks.

He also asked for shared recordation and transfer taxes.

The final product was more extreme than he envisioned.

Bruchey said Friday he figured on 21 percent as a fair amount for the municipalities. His letter, though, doesn't give a number.

"I never asked for 100 percent of the revenue" ? which is how the bill reads ? "although it would be nice," he said.

Donoghue met with city officials in December to hear their legislative priorities. Tax revenue sharing was one.

Donoghue recalled Friday that the city was to work on a plan with the county. They didn't come up with one.

Bruchey said it didn't matter because the county has given the city short shrift on revenue sharing for years, so he went ahead with his bill request.

Myers, R-Washington/Allegany, said he talked to Donoghue about Bruchey's Feb. 5 letter because the city is Donoghue's district.

Soon, it became Donoghue's bill.

"... That was something Delegate Donoghue decided to do on his own," Myers said.

Del. Christopher B. Shank, R-Washington, said the tax issue should have been taken up by the full delegation, which could have worked on a compromise with the city and county.

Delegation support, according to Shank, plays a key role in the success of a bill if it addresses a local issue.

The same conflict arose recently over a bill to smooth the path for a new Washington County Hospital.

A majority of the delegation second-guessed Donoghue's decision to solely sponsor the bill. Donoghue, though, said his Democratic connections would help advance the bill, which was filed late because Washington County Health System's request for it came in late.

Donoghue said he expected Sen. Donald F. Munson, R-Washington, to file a Senate version. Munson didn't. When it became Donoghue's bill, Munson said he was waiting to see what happened in the House.

The hospital bill got stuck in the House Environmental Matters Committee when the committee chairwoman asked for a letter of delegation support. Myers said there wasn't enough support for a letter.

The bill appears to be dead.

The tax-sharing bill hit a similar wall in the House Ways and Means Committee.

" ... We're not going to do anything until we hear from the delegation," Del. Kumar P. Barve, D-Montgomery, whose subcommittee considered the bill, said Friday.

But Donoghue said passage of the bill was secondary.

After getting a request for a bill past the filing deadline, he worked to get it into a committee and let the issue be aired.

"The mayor knew it wouldn't go anywhere ..." Donoghue said. "It was just to begin the discussion."

Donoghue said he told that to Del. Sheila E. Hixson, D-Montgomery, the committee chairwoman; Barve must have been out of the room.

Shortly after a reporter interviewed Donoghue on Friday, Barve called the reporter back to say he just had checked notes of the hearing and found that Donoghue's comments about the bill were right.